Budget cuts to ICT likely: IIA

The Internet Industry Association (IIA) has predicted that ICT investment will be cut back in today’s federal budget.

IIA chairman, Bruce Linn, told Computerworld Australia that he does not “expect to see anything significant” coming out of the budget in terms of ICT investment.

“I think we’ll see cutbacks in several government programs in the next 12 months in order to achieve this must-have surplus,” he said.

“I think we should expect very little from the budget, except cuts to achieve the surplus. It won’t be in any way an investment budget.”

Linn said deferments to government ICT spending in areas such as defence, e-health, and education are also likely.

“I think there will be cuts to other government investment in ICT, probably not cuts so much as deferments, because the government would want to defer them until the following financial year would be my guess, so it will be delayed in spending which of course is not fit for the industry which is struggling in present time.”

However, the National Broadband Network (NBN) is likely to be spared from the 2012-13 budget’s casualty list, according to industry experts.

Linn said the NBN might remain unscathed from potential ICT budget cuts, as it is one of the Federal Government’s pet projects.

“I think the NBN will probably remain untouched because it’s the government’s flagship project and that’s a good thing,” he said.

“We thought the [NBN’s] rollout is a little slow and we’re talking about a 10-year rollout while the world would’ve moved on in 10 years’ time, but we do support the NBN. I don’t think there’ll be any cuts to that.”

Communications Alliance chief executive, John Stanton, added: “We certainly want to see budgetary support for the NBN maintained — this initiative is a game-changing investment in Australia’s economic future and the return on investment it will bring to Australia must see it remain a budget priority.”

Industry budget wish list

Despite the pessimism about ICT investment the IIA's Linn said that ideally, the budget should provide more funding in the ICT sector to develop ways in making the sector more attractive to investment.

“The [ICT] sector is not doing terribly well at the moment,” he said. “The economy, as we know, is booming in sectors but the ICT industry is not in any way in boom times.

"There’s a lot of now demand for greater and greater ICT implementations, but there’s simply not the funding available to support them.”

In addition, Linn said the government should look into offering more training within the sector due to a growing ICT skills shortage.

“The other thing that is not available on which I think we need to get from government is a greater commitment to providing training in the sector,” he said.

“There’s an emerging skills shortage in the sector once more and that’s an important aspect.”

Indeed, Australian Computer Society (ACS) figures suggest that 14,000 extra skilled workers are required to meet demand in 2012. That figure is expected to rise to as much as 35,000 by 2014.

According to the ACS chief executive, Alan Patterson, the budget should give priority to the provision of ICT training to meet industry demands.

“Investment in ICT education and university programs to support ICT skill capacity [should be given priority], as this will allow students to gain industry-relevant skills and experience that enhance both their future studies and employment prospects,” he said.

“This will help decrease the current skills shortages and help ensure Australia has ICT skill capacity to fill this shortage and avoid looking offshore to fill the current gap.”

Patterson said the ACS would like to see more investment be made to the digital economy, which was valued at $100 billion in 2011.

“The ACS believes the benefits of participating in the digital economy need further focus,” he said.

“Investment in the establishment of education frameworks to promote use and participation in the digital economy [is needed]. This will help ensure every Australian can embrace the digital economy.”

Patterson also wants to see the government taking a more active role in supporting the participation of SMEs in the digital economy.

“With the development of the digital economy and businesses being encouraged to use e- services, cyber resilience in SME and non-critical infrastructure/services requires attention,” he said.

Regulation also seems to be a thorn in the industry’s side, with both Linn and Stanton calling for its removal.

“I think the other thing we’d like to see more generally from government is a reduction in regulation and red tape, particularly for the small to medium enterprises,” Linn said.

“That’s becoming an increasing burden day-by-day and the government has promised since it’s come to power to do something about that and really has failed to achieve anything substantial, and that’s a cost burden on the industry at a time when it doesn’t need that kind of burden.”

Stanton added: “The telecommunications Industry would be pleased to see the Government strengthen its commitment in the budget to the development of Australia’s digital economy, including through an expansion to the Digital Economy Strategy, and via a program to remove much of the out-dated regulation that still sits on the books today, imposing unnecessary imposts on industry, without commensurate benefit to consumers.”

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